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TMI Blog2021 (6) TMI 960X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 1 APPL/JPR/CGS T/AL/83/IX/ 2020/ Order in Original No. ZY0806200259640 dated 21.06.2020 Refund rejected Rs. 1,37,750/- .+Rs. 31,067/-(as withdrawnbythea ppellant)=Total 1,68,817/- August- 2018 2. Brief facts of the case are that the appellant having GSTIN 08AAJCA5268J1ZA has filed the application for refund vide GST-RFD-01 dated under Section 54 of the CGST Act,2017with ARN No. AA0812190291376 dated 19.12.2019 for the period August-2018-2019 amounting to Rs. 33,63,958/- and with ARN No.AA080520005940N for the period April-2019-2020 amounting to Rs. 28,09,502/-for refund of unutilized Input Tax Credit accumulated due to Export of Goods and Service without payment of taxin terms of sub Section 3(a) of Section 16 of IGST Act,2017 read with Rule 89 of CGST Rules, 2017. 2.1 However, on examination of documents of refund claim for the period April-2019-20, the adjudicating authority has found inadmissible amount of Rs. 31,067/- as wrong ITC and Rs. 1,37,750/- as 'Other' and accordingly, a Form GST RFD-08 Show Cause Notice No.ZS0806200063095 dated 05.06.2020 was issued to the appellant with the Remark- i) that the claimant vide letter dated 01.06.2020 has withdrawn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C of Rs. 1,37,750/- on exempted sales. Thus, the learned Assistant Commissioner has wrongly disallowed Refund claim of Rs. 1,37,750/- from the amount of refund claimed by the Appellant for the month of April 2019, while issuing Adjudication Order No.ZY0806200259640 Dated 21-6-2020 against the Appellant. At the cost of repetition, it is submitted that the said order, to the extent of disallowing refund of Rs. 1,37,750/- is factually incorrect, non-speaking and bereft of any legal provisions and issued in violation of the principles of natural justice, therefore, it deserves to be modified to grant us refund of Rs. 1,37,750/- disallowed wrongly. 3.4 The learned Assistant Commissioner has not given any findings on the detailed submissions of the Appellant, nor has he given any reason for rejection of certain amounts and no provisions of law have been cited in the impugned Adjudication Order. 3.5 In terms of Section 17(1) of the Central Goods and Services Tax Act, 2017, where the goods or services or both are used by the registered taxable person partly for the purpose of any business and partly for other purposes, the amount of input tax credit shall be restricted to so much of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T', in respect of inputs on which credit is not available under section 17(5) [ineligible ITC], be denoted as 'T3'. (e) The amount of input tax credit credited to the electronic credit ledger of registered person, be denoted as 'C1' and calculated as - C1 = T- (T1+T2+T3). (f) The amount of input tax credit attributable to inputs and input services used exclusively in or in relation to taxable supplies including zero rated supplies, be denoted as 'T4'. (g) 'T1', 'T2', 'T3' and 'T4' shall be determined and declared by the registered person at the invoice level in form GSTR-2 and at summary level in form GSTR-3B. (h) Input tax credit left after attribution of input tax credit under clause (f) shall be called common credit, be denoted as 'C2' and calculated as - C2 = C1- T4. (i) The amount of input tax credit attributable towards exempt supplies, be denoted as 'D1' and calculated as - D1= (E/F) xC2. Here, 'E' is the aggregate value of exempt supplies, i.e., all supplies other than taxable and zero rated supplies, during the tax period, and 'F' is the total turnover of the registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Rules, 2017 for the month of August 2018. A copy of the Refund Application for the month of August 2018 is attached. 3.15 Similarly, the Appellant had filed an Application for Refund of Rs. 28,09,502/- for the month of April 2019. A copy of the Refund Application for August 2019 is attached. 3.16 Sub Section (3)(a) of Section 16 of the Integrated Goods and Services Tax Act, 2017, inter alia, provides that a registered person making zero rated supply shall be eligible to claim refund availing the option to supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit. 3.17 In this regard, kind attention of the Hon'ble Appellate Authority is invited to the provisions of Rule 89 (4) of the CGST Rules, 2017 which has provided the formula for claiming refund of Input Tax Credit in case of supplies of zero rated goods/services without payment of IGST in terms of Section 16(3) of the IGST Act, 2017. 3.18 Accordingly, in terms of Sub-Section (3)(a) of Section 16 of the Integrated Goods and Services Tax Act, 2017 read wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice used exclusively for exempted supply of MEIS Licence and Rs. 50,438/- in respect of Input and Input Services used for taxable supplies including Zero-rated supplies as well as exempted supply of MEIS Licence is attached. 3.27 Accordingly, the Appellant had calculated the amount of input tax credit attributable to supply of exempted supply in terms of Rule 42 of the Central Goods and Services Tax Rules, 2017 during the month of August 2018 which comes to Rs. 16,313/- as per the attached Chart attached. 3.28 Accordingly, we had paid the excess credit amounting to Rs. 16,313/- computed separately for input tax credit of Central Tax, State Tax and Integrated Tax vide entry numbers DC0806200082724 dated 20-06-2020 in our electronic ledger account /Form GSTR-3B and intimation has been sent through Form GST DRC-03. Copies of the electronic ledger account /Form GSTR-3B and Form GST DRC-03 are attached. 3.29 We have also paid an amount of Rs. 5335/- vide Challan No.20060800124587 dated 20-06-2020 being interest on the excess input tax credit availed by us. Copy of the Challan No. 20060800124587 dated 20-06-2020 is attached. 3.30. In view of the above facts, Net ITC for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... central tax, State tax, Union territory tax, integrated tax and cess; "exempt supply" means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply; B. Section 54 of the CGST Act, 2017 provides that :- Refund of tax.- (1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application before the expiry of two years from the relevant date in such form and manner as may be prescribed: Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim such refund in the return furnished under section 39 in such manner as may be prescribed. (2)....... (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period : Provided that no refund of unutilised input tax credit shall be allowed in cases other than- (i) zero rated supplies made without payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be granted as per the following formula:- Refund Amount =(Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x Net ITC / Adjusted Total Turnover. In terms of Clause (B) of Sub-rule (4) of Rule 89 ibid "Net ITC" means input tax credit availed on inputs and input services during the relevant period other than the input tax credit availed for which refund is claimed under rule 89(4A) or 89(4B) or both. Further, in terms of Clause (E) of Sub-rule (4) of Rule 89 ibid "Adjusted Total Turnover" means the sum total of the value of - (a) the turnover in a State or a Union territory, as defined under clause (112) of section 2, excluding the turnover of services; and (b) the turnover of zero-rated supply of services determined in terms of clause (D) above and non-zero-rated supply of services, excluding - (i) the value of exempt supplies other than zero-rated supplies; and (ii) the turnover of supplies in respect of which refund is claimed under sub-rule (4A) or sub-rule (4B) or both, if any, during the relevant period. E. Section 17(2) of the CGST Act, 2017 provides that - (2) Where the goods or services or both are used by the reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e towards exempt supplies, be denoted as 'D1' and calculated asD1= (E'F) x C2 where, 'E' is the aggregate value of exempt supplies during the tax period, and 'F' is the total turnover in the State of the registered person during the tax period: Provided that where the registered person does not have any turnover during the said tax period or the aforesaid information is not available, the value of 'E/F' shall be calculated by taking values of 'E' and 'F' of the last tax period for which the details of such turnover are available, previous to the month during which the said value of 'E/F' is to be calculated; Explanation: For the purposes of this clause, it is hereby clarified that the aggregate value of exempt supplies and the total turnover shall exclude the amount of any duty or tax levied under entry 84 of List I of the Seventh Schedule to the Constitution and entry 51 and 54 of List II of the said Schedule; (j) the amount of credit attributable to non-business purposes if common inputs and input services are used partly for business and partly for non-business purposes, be denoted as 'D2', and shall be equal to five per cent. of C2; and (k) the remainder of the common ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een reversed by the appellant in terms of Section 17(2), The amount which has been deducted along with interest, has been calculated on the basis of following formula- Rs. 127694/-= 869740/22912407 x 3363958 Where Rs. 869740/- is value of exempted supply, Rs. 22912407/- is total value of zero rated and exempted supply and Rs. 3363958/- is the amount of refund sanctioned for August, 2018. 8.4 I observed that the appellant has argued that during the month of August 2018, the Appellant had transferred MEIS Scrips/Licence on receipt of consideration charges amounting to Rs. 8,69,740/- which is reflected in Para 3.1(c) of the Form GSTR-B for August 2018 as with effect from 13-10-2017, Duty Credit Scrips [MEIS etc.] falling under Heading 4907 have been exempted from levy of Goods and Service Tax by Notification No. 35/2017-C.T. (Rate), dated 13-10-2017.I find that the appellant has further submitted that for the supply of MEIS Licence, the Appellant had availed Input Tax Credit of Rs. 14,362/- on Consultancy Services used exclusively for exempted supply of MEIS Licence and also availed Input Tax Credit of Rs. 50,438/- in respect of Telephone services, Courier Service, Computer Repairi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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